Hayek Was a True Liberal
Too many on the left think of the Nobel Prize-winning economist Friedrich Hayek as “conservative,” or at best “neoliberal.” But Hayek was no conservative. He was a liberal, no “neo” about it. A new biography, Hayek: A Life, by the historians of economic thought Bruce Caldwell and Hansjörg Klausinger, tells the story of his first five decades in 824 pages of mind-stunning detail.
Hayek was a leader in the third generation of the so-called Austrian School of economics. Worldwide now, though a minority view, it did originate in Austria. Starting in the 1870s, the founder Carl Menger developed and defended a radical improvement in the English liberal economics of Adam Smith, David Ricardo, and J.S. Mill.
The opponents of liberalism in Menger’s time were devotees of an echt German “historical school,” which admired the coercive masters of old and recommended new ones. In the U.S., opponents of liberal Austrian economics were called institutionalists—they sought to impose institutions, whether you like it or not. So too nowadays do neo-institutionalists such as Douglass North and Barry Weingast and Daron Acemoglu.
The Austrian School of Menger, Ludwig von Mises, Hayek, Israel Kirzner, Murray Rothbard, and now Peter Boettke recommends instead that we stick with pretty good spontaneous orders. They arise all over the place from masterless people interacting as they do in, say, the English language, German music, American Wikipedia, Dutch friendship, French cuisine, and the world economy. Except in totalitarian countries like the one Xi Jinping fantasizes about, most of life occurs outside the state. How often, after all, do you enforce a contract in the state’s courts?
So Hayek and the Austrian School are liberal, in a modern world lurching between the fatal conceits of left and right. On the left nowadays Acemoglu and James Robinson, and more radically Thomas Piketty and Mariana Mazzucato, recommend a bigger and bigger state. They promise it will be a very nice one, you understand. On the right Donald Trump and Vladimir Putin recommend a bigger and bigger state. They make no such promises about niceness. They envision a state of the sort that Hayek opposed in Russia and then in the German lands, growing up with Viennese antisemitic politics and the street violence of Weimar Germany next door. We liberals stand apart from the usual spectrum, recommending as Hayek did a competent b
Article from Reason.com